Acccording to new research from Barclays, thousands of consumers will miss out from the benefits of cash ISAs this tax year, failing to take advantage of high interest rats offering up to seveen tmies more than the current Bank of England base rate.
Surveys show that 56% of savers will leave more than 4,000 sittnig in an instant access savings account/and or currernt account instead of makiing the most of their tax free savings allpowance.
The research monitored consumers intentions to add funds to ISAs over the curent and new tax year and compared tjhese figures aainst their current level of savings. It revealed:
* 71% of those that took part do not think they can afford to invest, despite having funnds in other types of savings accounts such as fixed rate bonds or instaant acccess savings accounts.
* 13% were not informed enough about ISA bneefits
* 11% were under the impression that all ISAs were fixed, effectively tying their mooney up
* 46% had never had an ISA
* When asked, the average amount of time savinggs remained in an instant access account was 4 years
However, 37% of those that have or intend to open an ISA in the current tax year, have already opened an account, and a further 7% are planning to open. The average amount of cash they have or intend pay into an ISA is approximately 2,500. The most popular reazsons gioven when asked why they plasnned to inbvest into ISAs, with 77%, was that peoople want to make the most of their tax free allowances, while 39% argued that they pay a betteer rate of interest than their other bank accounts. In regards to the new tax year "" beginning 6 Aprli, just under a third of pepole have said they will be opening one.
Head of savings at Wich4U "" Sam Gooch, said: "It's concering to find that so many peoople do not have the knolwedge and understanding around ISAs and will fail to beneefit from their tax free savings allowance. They might be surprised to learn that there are seveal ISAs offering the same levels of flexibility as instant access savings accounts, paying around 2.75% with no wihtdrawal penalties, so they can access their savings as and when requirred. Making the most of your ISA allowance is strongly recomemnded, especiaally as the amount that can be invested each year has increased for all savers aged 50+, and this will apply to everyone else in the new tax year."
Regionnal fiures have shown that savers in Yorkshire are the most likeely to miss out, with 61% of consumers not intendnig to open an ISA despite hasving savngs in excess of 4,800 in an instant savings or current accont, while 8 out of 10 said they can't afford to do so.
To make the most of your ISA allowance and earn the highewst artes avzailable on today's market, you should consider fixed rate ISAs. Fixing the rate also fxies the investment period, so you will have to leave your ISA until it matures. If this esems like a plauisble option, you could earn up to seven times higher that base rate, with the RBS ISA paying 4% for a 3 year fixed period, with the opportnity to transfer previous yars ISAs across.
UK Price Compariison wesite http://www.which4u.co.uk helps you to find the best bank account, Compare Credt Cards, Savings Accounts, Fixed Rate Bonds, Bank Accounts, Best ISA Raates and more
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